China Rubber Market Outlook

Consumer demand is still strong. In the new century, China's rubber consumption has been showing strong growth, in 2006 the situation will not be a major change. It is estimated that the various types of rubber consumption reached or more than 5,500,000 tons, representing an increase of 10% over last year.
Chinese rubber consumption in 2006 is still strong, mainly by the following factors:
First, the rapid growth of the national economy, the rapid growth of economic output, China's rubber consumption to promote, is self-evident; Second, China is currently the industry is still in the traditional period of industrialization, heavy and chemical characteristics of the obvious, a large number of infrastructure Construction, logistics, to stimulate the tire rubber products, such as the rapid increase in consumption; third, with the Chinese people's income and living standards, access to a large number of residents in the family car, so that the tire rubber, and so the demand will share some of the more than So that the Chinese rubber consumption has a solid foundation for strong growth; Fourth, China's rubber export volume of more than directly, but through the rubber exports of indirect exports is a big At the same time, the world's major rubber producing companies in China to transfer Continues in this pattern, although the trade friction will have some negative impact, but the whole of the international market, China's rubber demand will not be reduced.
New resources are more gentle. 2005 Chinese domestic rubber production grew slightly, with strong consumer demand to form clear contrasts. 2006 is expected to meet the domestic rubber production, or more than 2,300,000 tons, representing an increase of 5% over last year, continue to moderate growth, synthetic rubber output of more than 170 million tons.
2006 rubber flat growth in resources is an important reason for this is that in 2005 domestic production suffered a more serious natural disasters, reducing the output, not much inventory, in the first quarter of the off-season have a significant impact on supply.
It is worth noting is that with some time ago, Shanghai Futures Exchange warehouse stocks of natural rubber much more than in 2004, almost 200,000 tons. This makes 2006 the total resources available for domestic rubber, especially in natural rubber supply capacity significantly weakened.
Through the above-mentioned two aspects of the comparison can be seen only in the domestic supply and demand comparison, the gap is greater than the market in 2004. As a result, the dependence on outside resources more, as required by the volume of imports to more than 2005 levels. Initial expected, the year a variety of rubber imports can not be less than 3,000,000 tons more than this year, up 20%.
The high market price shocks. On the whole, as long as there is no accident, the tight supply and demand, the requirements in 2006 the market price of rubber is running at a relatively high level. At present, even if the price significantly emergence of the very back, and even into the low-price range, it will not last, soon picked up.
Of course, the new year, China's rubber prices are still some bad elements for a further upward price pressure.
First, the import tax rate of change in uncertainty. In the future, China's natural rubber import tariff adjustment is, a great controversy. But no matter the final outcome, at least if tariff reduction is a big uncertainty, it is the existence of this uncertainty, as a sword of Damocles, hanging over the market price of rubber, making Latin America High prices of many, with more to worry about
Second, the dollar continued to strengthen. After several years of devaluation, the medium-term the dollar will tend to strengthen (also a long-term depreciation). In 2005 has shown this trend. If the dollar continues to rise in the future, is bound to lead to dollar-denominated units in the international market price of rubber fell. At the same time, the dollar strengthened, but also bring a corresponding appreciation of the renminbi, the Chinese rubber to reduce the cost of imports.
Third, oil prices likely to be a big back. For 2006, oil prices in the international market to determine the current views of the larger differences. The point was made that the world has entered the high oil price risk, growing bubble, oil prices in the future will be deep-diving sites. If oil prices in the international market really emerged so dramatically in the back, it is bound to lead to falling prices of synthetic rubber, and natural rubber prices have dragged down.
This shows that with 2005, 2006, is no longer profitable, but profitable and bad factors coexist, the two factors as the price of changing market conditions affecting the turn of the leading factors causing the market price A substantial shock.